Attracting Investors to Your Impact Investment Fund - Evidence, Tools & Tips
Impact Investing is a relatively new term to most people, used to define a broad range of investments made across asset classes, regions, and even sectors, directed at businesses with a positive and measurable social or environmental impact. As a growing field, there is a need for impact investment funds to dispel myths and negative misconceptions, to support increased public understanding and attract investment. So, how can we attract investors, and persuade them to make impact investments? Here, we highlight the evidence, tools, and tips that we’ve been discussing amongst our network!
Understanding Areas of Investor Interest
A 2020 study suggests that prospective investors are most attracted to impact investment opportunities that indicate strong commitment, presence of clear social needs identification & description, evidence of efficient cooperation, and a good track record. They indicated being most interested in case studies, risk mitigation strategies, ‘selective and precise’ indication of return on investment, and investor pain points.
This study suggested that areas for strengthening centered on increasing intersector collaborations (between researchers, the private sector, and the ‘social enterprise world’), in addition to increased positive media exposure.
Considering Investor Demographics
It’s important to consider who you’ll be targeting when building your content. Is there a specific age, gender, or region you’ll target?
For example, while evidence indicates that young people are more interested in impact investing, older people are more likely to actually make those investments- this is thought to be due to higher levels of confidence and perceived self-expertise. In fact, it is reported that 4 in 10 millennials see their lack of knowledge as a barrier to investing - and millennial women are the least likely of all groups to invest due to perceived lack of knowledge.
Generally speaking, men are overall more likely than women to make investments. Interestingly though, evidence suggests that women are actually more likely than men to make impact investments. Of course, it is also important to note that this can vary according to geographical and cultural context.
Women are statistically more likely to say that impact is an important factor in their investment decisions, and more interested in learning more about impact investment. They are most likely to indicate that they express their values and ‘support issues important to them’ through investment decisions. A 2018 study undertaken by IUPU Women’s Philanthropy Institute on United States Impact Investors, depicted here, highlights women’s prominent role in impact investing.
Utilising Online Marketing Tools
There are a vast range of online tools and resources available to assist you in building your marketing strategies. Here are a few free-to-trial tools that we think offer valuable insights, at no immediate cost!
BuzzSumo is a cloud-based platform that offers a 30 day free trial, and allows you to understand more about your engagement and outreach opportunities across social media, conduct competitor analysis, and create content strategies.
RiteTag is a social media marketing app that gives users hashtag suggestions and analytics based on real time hashtag engagement, offering a 7 day free trial to users.
Strengthening your Social Media Presence
Did you know that research across North America, Europe, and Asia revealed that 63% of institutional investors use social media as their key research source, while only 48% consult finance-specific trade publications? In fact, 59% of investors spend up to 30 minutes reading one single piece of content. The presence of institutional investors on social media has grown significantly in recent years, and continues to do so.
So, given this trend, it’s important to strengthen your presence on social media, across a number of diverse platforms.
One way you can do this is to expand the number of platforms you utilise. Interestingly, 55% of Ultra High Net Worth (UHNW) investors check their Facebook daily. Social media use among millennial investors is particularly high- 48% indicating that they plan on using social media platforms in the next five years to guide their investments. While often seen as a secondary information source, studies suggest that Facebook influences investment decisions - particularly those made by households, and non-profit organisations.
So if you haven’t yet done so, consider expanding across to platforms such as Facebook, or YouTube (used by 30% of UNHW individuals). When creating content for these social media platforms, utilise the tools and tips above to create informative, entertaining, evergreen content that matches areas of investor interest! Evergreen content refers to search-optimised content which remains relevant and sustains interest over a long period of time.
At Frontier Brokers, we understand that every investor is different, and this guide may not necessarily be applicable to every organisation, or investor! However, we believe that better understanding investor demography and behaviours may encourage you to consider new, innovative ways to attract interest, and ultimately, investment too.
Have questions about impact investing, or investing with a gender lens? Contact us on Linkedin to learn more, or take a look at some of our resources, like our Animated Introduction to Gender Lens Investing.
More information on the Frontier Brokers Network can be found on our website: https://www.scalingfrontierinnovation.org/initiatives/brokers/
Or follow us on LinkedIn at: https://www.linkedin.com/company/frontier-brokers-network/
